Closing Recap

U.S. stocks finished mostly lower in a quiet session as investors awaited the Federal Reserve’s pivotal policy decision this afternoon, pulling back slightly from recent record highs; gold surged to another all-time high, oil rallied, while the dollar plunged to multi-year lows. In the currency markets, the U.S. dollar was crushed, with the DXY falling to a 4-year low as the Euro surged above 1.1850 and the Yen strengthened, with traders aggressively positioning for a dovish Fed outcome. The British Pound also hit a 10-week high, reacting to both U.S. dollar weakness and a mixed domestic inflation report.

Key Takeaways 

• Stocks Consolidate Before Fed: Major indices traded in a tight range and finished mostly lower, with the Nasdaq 100’s 9-day winning streak ending, as investors awaited the FOMC rate decision. 
• Fed Rate Cut Fully Priced In: Markets have fully priced in a 25-basis-point interest rate cut, with a small but notable chance of a larger 50-basis-point move. The focus is on the Fed’s “dot plot” and Powell’s press conference. 
• Gold Hits New Record High: Gold prices continued their historic run, with the December futures contract settling at a new all-time high of $3,725.10 per ounce. 
• Strong Economic Data Ignored: Better-than-expected data on Retail Sales, Import Prices, and Industrial Production was largely overlooked as the market’s focus remained squarely on the Fed. 
• Dollar Crushed: The U.S. dollar index plunged to a 4-year low, with the EUR/USD pair hitting its highest since September 2021 as traders bet on a dovish Fed, while the Japanese Yen also saw significant strength. 
• Crypto Consolidation: Bitcoin prices remained steady above $111,000, with traders awaiting the Fed decision for the next major catalyst. 
• Oil Rallies, Yields Slip: Crude oil prices rose for a third straight session, while Treasury yields eased as investors braced for the Fed’s announcement. 

Market Overview

U.S. equity markets experienced a day of quiet consolidation, with major averages finishing mostly in negative territory as investors showed little conviction ahead of this afternoon’s highly anticipated Federal Reserve policy decision. The S&P 500 and Dow both edged lower, and the Nasdaq 100’s impressive nine-day winning streak came to an end. The market’s powerful upward momentum, which has pushed indices to record highs, appears to have paused as traders await what is expected to be the first interest rate cut of the year. 

Index	Up/Down	% Change	Last
DJ Industrials	-125.18	-0.0027	45758
S&P 500	-8.48	-0.0013	6606
Nasdaq	-14.79	-0.0007	22333
Russell 2000	-2.1	-0.0009	2403

While a 25-basis-point rate cut from the Fed is almost entirely priced into the market, significant uncertainty remains regarding the central bank’s future path. The focus will be on the updated Summary of Economic Projections (SEP), particularly the “dot plot,” which will reveal policymakers’ expectations for future rate cuts. The market is currently pricing in a more aggressive easing cycle than the Fed projected in June, creating the potential for a “hawkish” surprise if the Fed signals fewer cuts in 2026. Fed Chair Powell’s subsequent press conference will be critical in shaping the market’s interpretation. 

Economic data released yesterday was stronger than anticipated, with August Retail Sales, Import Prices, and Industrial Production all beating consensus forecasts. However, this positive data was largely ignored by a market singularly focused on the Fed’s decision. The prevailing narrative remains that the labor market is weakening enough to warrant easing, a view that will be tested by the Fed’s commentary.

Economic Calendar

The main event today is the Federal Reserve’s policy decision, press conference, and release of economic projections. Today’s Major U.S. Events (Scheduled): 

• FOMC Interest Rate Decision (2:00 PM ET): A 25-basis-point cut is widely expected. 
• FOMC Summary of Economic Projections (SEP) / “Dot Plot” 
• Fed Chair Powell Press Conference (2:30 PM ET) 
• Bank of Canada (BoC) Rate Decision: Cut rates by 25 bps to 2.50%

Major International Releases/Data (Today): 

• UK CPI (Aug): Headline 3.8% (un-changed), Core 3.6% (from 3.8%), Services 4.7% (from 5.0%). Softer core and services inflation increased Bank of England rate cut odds.

Commodities, Treasuries and Currencies 

Gold prices continued their record-setting run, with the December futures contract gaining $6.10 (+0.16%) to settle at a new all-time high of $3,725.10 per ounce. The rally is being driven by a powerful cocktail of anticipated Fed easing, a plunging U.S. dollar, strong central bank buying, and safe-haven demand. Crude oil prices rose for a third consecutive session, with WTI gaining $1.22 (+1.93%) to settle at $64.52/bbl, supported by a weaker dollar and ongoing geopolitical tensions. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	1.22	USD/bbl	64.52
Brent	1.03	USD/bbl	68.47
Gold	6.1	USD/oz	3725.1
EUR/USD	0.0105	USD	1.1865
USD/JPY	-1.07	JPY	146.35
10-Year Note	-0.008	%	0.04026

In the currency markets, the U.S. dollar index (DXY) plunged -0.65% to a 4-year low of 96.65, as traders aggressively positioned for a dovish Fed outcome. The EUR/USD pair surged, climbing 0.88% to 1.1864, its highest since September 2021. The Japanese Yen also saw significant strength, with USD/JPY tumbling below 146.50. The British Pound hit a 10-week high despite cooling UK services inflation (which increased BoE rate cut odds), as the focus remained on U.S. dollar weakness. U.S. Treasury yields were little changed to slightly lower, with the 10-year yield holding just above 4.026% and the 2-year yield at 3.51%, as the bond market awaited the Fed’s decision. A 20-year Treasury bond auction was well-received, showing solid demand.

Looking Ahead 

The market’s entire focus is on the 2:00 PM ET release of the FOMC statement and economic projections, followed by Chair Powell’s press conference at 2:30 PM ET. The market reaction will hinge not on the widely expected 25 bps rate cut, but on the “dot plot” projections for future cuts and Powell’s tone. A dovish signal could fuel further gains in equities and gold, while a “hawkish cut” that signals a higher-for-longer path could trigger a sharp reversal. Expect significant volatility during and after the announcement.